 "Hero MotoCorp Q4 result: Net profit increases by 16.4% to Rs 943 crore")
The consolidated net profit of Hero MotoCorp rose by 16.4 per cent year-on-year (Y-o-Y) to Rs 943.46 crore due to price hikes, stable commodity prices, successful product launches, and an overall rise in demand for two-wheelers in the country.
India’s largest two-wheeler maker saw its consolidated net profit for the entire 2023-24 jump by 33.6 per cent Y-o-Y to Rs 3742.16 crore. Niranjan Gupta, chief executive of Hero MotoCorp, termed the financial performance during 2023-24 as “remarkable”.
“From the highest number of product launches, to the expansion of new format retail outlets and upgrades at super speed, to a digital‐first approach in premium, we set the building blocks in place for accelerated growth in future. Our fiscal prudence and strategic actions ensured that our financial performance has been robust, resulting in highest ever annual revenue and profits," Gupta said.
Hero MotoCorp’s domestic sales during 2023-24 stood at 5.42 million units, a 5.1 per cent Y-o-Y increase. The company on Wednesday declared a final dividend of Rs 40 per share. This dividend together with interim and special dividend of Rs 100 per equity share, takes the aggregate total dividend for the year 2023- 24 to Rs 140 per equity share. The company on Wednesday also announced that it is setting up a wholly-owned subsidiary in Brazil.
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“With commodity prices remaining stable, expectations of normal monsoons, and government spending expected to increase, we see multiple tailwinds for the sector over the upcoming quarters,” Gupta mentioned.
He emphasised that the company’s market share would be driven by their successful launches in the premium and 125 cc segments achieved throughout 2023-24. Furthermore, he mentioned that Hero is going to boost their scooter portfolio by launching Xoom 125 cc and Xoom 160 cc in the first half of 2024-25.
D K Mudaraddi, research analyst, StoxBox, believes Hero MotoCorp made prudent pricing changes during the quarter and focused on keeping realisations high. “Commodity prices continue to stabilise and Hero has capitalised well on them. Almost all six of Hero’s launches during the year have been received well, especially the 3 Xtreme variants and Karizma XMR, which have pushed Hero in the right direction in premiumising their portfolio,” he said.
Mudaraddi mentioned that Hero’s marketing strategies, including the expansion of Premia stores and the upgrade of existing stores to Hero 2.0, were expected to benefit the company, as the increase in consumer interest and preference was bound to lead to higher market share.
Additionally, he noted that the company's performance in the mid-weight segment, where competition was currently the highest, had been commendable; however, the market share changes would be closely watched to gauge consumer preference.
Looking ahead, he said that the expected revival of rural incomes and increase in government spending boded well for the entry-level motorcycle sector, and Hero was poised to benefit from it.